The present invention relates generally to techniques and systems for securing and synchronizing electronic communications between parties, e.g., over the Internet, and more particularly electronic communications involving financial transactions.
Methods for providing electronic or virtual cash by, for example, using "smart" cards having processors embedded therein are known in the art as an alternative to traditional plastic credit cards for guaranteeing payment from a buyer to a seller. These prior proposed methods secure the trade in one direction only, namely they provide some guarantee to the seller that he will get paid, but no guarantee to the buyer that he has received or will receive the wares, property or service expected.
A description of techniques relating to smart cards and the like may be found, for example, on the Internet at WWW.DIGICASH.COM. These techniques are concerned with eliminating the inconvenience to the merchant associated with the need to verify the authenticity of credit cards by making a telephone call to the issuing institution. Such systems are suitable primarily when the merchandise is physically inspected and accepted by the buyer at a retail outlet, for example. The one-way security guarantees provided by electronic cash make use of public key encryption algorithms, e.g., RSA, in which a message may be encrypted with a secret key but decrypted with a published key, or vice versa, depending on whether it is desired to ensure that no false messages can be sent or whether it is desired to prevent messages being intercepted and decrypted. As is also known, both techniques can be used at once to authenticate the source and to prevent interception.
Other forms of electronic trading have evolved in the context of stock markets and exchanges such as the NASDAQ, the Chicago Grain Exchange and the like, a purpose of which is to facilitate brokerage services by providing computer assistance in preparing paperwork of the traditional kind, such as transaction confirmations and settlements. The sort of electronic trading assistance provided by these computer systems used at major exchanges is therefore not concerned with providing an automated means of registering the ownership of assets and guaranteeing the nature and existence of assets, so much as providing mechanisms for traditional brokers to execute transactions more efficiently. Such systems are described for example in U.S. Pat. Nos. 5,375,055, 5,297,031, 5,297,032, 5,101,353 and 5,305,200.The nature and existence of assets being exchanged in these conventional trading systems still relies for its guarantees upon a trusted human broker.
Conventionally, many parallel systems exist for registering the ownership of major assets, including, for example, the Department of Motor Vehicles (DMV) for registering ownership of motor vehicles; the local courthouses, for registering the ownership and descriptions of real estate, as well as brokerages and banks for registering the ownership of cash, stocks and bonds and other commercial paper. These prior art systems, originally conceived to be run entirely by human clerical effort, have only relatively recently evolved to use computers to facilitate the manipulation of paper according to traditional principles in order to accomplish a greater volume of transactions with reduced clerical effort. Thus, it would be desirable to provide new systems and techniques for securing and synchronizing trade communications without the involvement of a traditional human broker or trusted institution to provide additional transactional efficiency.